Believed to Be the Largest Debt Collection Scheme Ever Prosecuted

Preet Bharara, the United States Attorney for the Southern District of New York, announced today the unsealing of an indictment charging TRAVELL THOMAS, the co-owner, chief executive officer, and president of a Buffalo, New York-based debt collection company (the “Company”), MAURICE SESSUM, a co-owner and chief operating officer of the Company, ANTHONY BRZEZOWSKI, the Company’s director of operations, three Company managers – JIMMY STOKES, HEATHER GASTA, and TACOBY THOMAS – and five Company debt collectors – ANTHONY CABA, COLUMBUS SIMMONS, CHARLES STARKS, WILLIAM CLARK, and MICHAEL CALLANDRA – with wire fraud and conspiracy to commit wire fraud in connection with a nationwide debt collection scheme that took in more than $31 million from thousands of victims across the United States. As alleged, the defendants tried to trick and coerce victims into making payments to the Company by making false threats and telling a host of lies, including that the Company was a law office and that warrants would be issued for the victims’ arrests if they failed to repay debts. Each of the individual defendants was arrested this morning and will be presented later today in federal court in Buffalo.

Also unsealed today were the guilty pleas of four Company employees – MARK LAVIN JOHN SALATINO, JESSICA MANN, and JENNIFER SHERK – for their participation in the fraudulent scheme. LAVIN, SALATINO, MANN, and SHERK each pled guilty pursuant to an information before U.S. District Judge Katherine Polk Failla.

Manhattan U.S. Attorney Preet Bharara said: “As alleged, the defendants engaged in what is believed to be the largest fraudulent debt collection scheme ever to be prosecuted, falsely threatening arrest and prosecution of countless Americans, including those who suffered from disabilities. The defendants charged today allegedly took ruthless advantage of the desperate situation in which their victims found themselves, using threats and lies to coerce payment and even trying to collect more money than the victims ever owed. Thanks to the tireless work of the criminal investigators in our office, those involved in this massive debt collection scheme will no longer be able to prey on vulnerable Americans burdened by debt.”

According to the allegations contained in the Indictment unsealed today in Manhattan federal court[1]:

Between 2010 and February 2015, the defendants routinely attempted to trick and coerce thousands of victims throughout the United States into paying millions of dollars in consumer debts through a variety of false statements and false threats. The defendants, using a variety of aliases, falsely told victims, among other things, that: (1) the Company was affiliated with local government and law enforcement agencies, including the “county” and the district attorney’s office; (2) the consumers had committed criminal acts, such as “wire fraud” or “check fraud,” and if they did not pay the debt immediately, warrants or other process would be issued, at which point they would be arrested or haled into court; (3) the victims would have their driver’s licenses suspended if they did not pay their debts immediately; (4) the Company was a law firm or mediation firm and that the Company’s employees were working with lawyers, a law firm, mediators, or arbitrators; and (5) a civil lawsuit would be filed, or was pending, against the victims for failing to pay their debts.

Employees of the Company at times prepared and sent correspondence to victims that made it falsely appear that the Company was affiliated with the government or courts. The defendants also routinely used legal-sounding terminology to invent legitimate-sounding but bogus explanations for the supposed criminal or legal action that had been or would be initiated against the victims for failure to repay purported debts, including that the victim had “breached a contractual agreement,” committed “theft of goods and services,” and engaged in “malicious intent to defraud a financial institution.” The defendants used these quasi-legal terms to frighten and coerce victims into paying actual or purported debts.

As a further part of the scheme, the defendants lied to victims by falsely inflating the balances of the debts so that they could collect more money from the victims than the victims actually owed, a practice known within the Company as “juicing” balances.

In total, from about January 2010 through November 2014, the Company collected more than approximately $31 million from thousands of victims across the United States. Of the money that the Company took in from victims, approximately $850,000 in cash was paid to SESSUM, approximately $750,000 in cash was paid to TRAVELL THOMAS, approximately $1.4 million was cashed from banks and ATMs, and tens of thousands of dollars was used to pay for TRAVELL THOMAS’s gambling expenses, tickets for professional sports games, TRAVELL THOMAS’s wedding reception, jewelry, and cosmetic surgery for his wife, among other expenses.

Collection Scripts

The defendants disseminated to Company employees and used collection “scripts” to solicit consumers by phone. The scripts contained various misrepresentations designed to trick victims into paying purported debts. For example, the scripts falsely stated, among other things: “In the next 48 hours we will be handing the matter over to our fraud department who will work together with your local district attorneys [sic] office in attempting to resolve the matter”; the collector was calling “from [the] law firm of Global Management Group”; the collector was a “claims associate calling on behalf of the legal processing firm” who would “file with our affiliate litigator in _____ county, to serve you to appear to plea”; and the consumers’ voice was being recorded on a “federally recorded line” for use “as admissible evidence.”

In about May 2015, following a federal criminal investigation of the Company, TRAVELL THOMAS instructed a former employee of the Company not to show Company scripts “to anyone” because they “weren’t legal.”

The Defendants’ Lies

The defendants made a variety of misrepresentations to victims across the country over the phone, and directed that those misrepresentations be made, including as follows:

As a part of the scheme, TRAVELL THOMAS and SESSUM, the owners and officers of the Company, at times instructed employees of the Company to make misrepresentations to victims, including to “juice” balances, in order to trick them into paying debts.

BRZEZOWSKI misrepresented to victims, including to a victim who stated that she was physically disabled and unable to work, that he was an attorney and an “associate with the firm” and was calling from an attorney’s office and would “handle their legals for free.” BRZEZOWSKI also instructed collectors on his team to falsely introduce him to victims on calls as an attorney in an effort to “close” a debt repayment.

STOKES misrepresented to victims that he would have a bench warrant issued for their arrest, would contact the “county” to initiate legal proceedings, and was not calling from a collection agency.

GASTA misrepresented to victims, including to a victim who stated that she was homeless, among other things, that “we are directly linked in with the court system,” her office had been “retained” regarding “bad check charges,” GASTA was working with attorneys, and the victims’ failure to repay the debt was a “federal issue.”

TACOBY THOMAS misrepresented to victims that he was a “process server” from “U.S. Couriers” with “legal documents” to serve to victims, that victims had committed “check fraud,” and that TACOBY THOMAS was calling from an “arbitration firm.”

CABA misrepresented to victims, including to the mother of a consumer undergoing dialysis for kidney failure, that he was a “legal investigator” calling from a law firm, the Company was not a collection agency, and victims had committed check fraud.

SIMMONS misrepresented to victims that they had committed a felony by failing to repay debts and would face charges for “theft of services” and fraud, that their driver’s licenses would be suspended, and that SIMMONS would refer the matter to his “attorney network.”

STARKS misrepresented to victims that they had committed a “federal offense” by failing to repay debt, that charges would be “press[ed],” victims were “under investigation for check fraud,” and that STARKS was working with attorneys.

CLARK misrepresented to victims that he was “lead investigator” with a law office that has been retained by a particular company that issues payday loans (the “Payday Loan Company”) to bring an action for fraud and theft of goods and services, victims had committed fraud, including “social security fraud,” and victims would be served with process at their “home or place of employment” within 72 hours.

CALLANDRA misrepresented to victims that they had committed fraud, including wire fraud under Title 18, United States Code, Section 1343, that CALLANDRA was “in contact with the magistrate,” and that “they’re en route right now . . . within 46 minutes they’ll be there to serve you.”

CABA, SIMMONS, CLARK, and STARKS were members of the Company’s so-called “elite team,” which used particularly aggressive and egregious tactics in attempting to trick consumers into paying debts.

In November 2012, the Payday Loan Company advised TRAVELL THOMAS that it had learned that employees of the Company were making improper threats and misrepresentations in order to collect debts purportedly owed to the Payday Loan Company and falsely indicating to consumers that the Company was providing collection services on behalf of the Payday Loan Company. The Payday Loan Company issued a letter to TRAVELL THOMAS directing him to cease and desist using the Payday Loan Company’s name in collecting debt. TRAVELL THOMAS refused, and employees of the Company continued to attempt to collect debts purportedly on behalf of the Payday Loan Company.

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TRAVELL THOMAS, 37, of Orchard Park, New York; SESSUM, 39, of Buffalo; BRZEZOWSKI, 49, of Buffalo; STOKES, 38, of Buffalo; GASTA, 41, of Buffalo; TACOBY THOMAS, 32, of Buffalo; CABA, 25, of Buffalo; SIMMONS, 46, of Buffalo; STARKS, 32, of Buffalo; CLARK, 30, of Buffalo; and CALLANDRA, 31, of Angola, New York, are each charged with one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison, and one count of wire fraud, which carries a maximum sentence of 20 years in prison. LAVIN, 45, of Buffalo; SALATINO, 34, of Amherst, New York; MANN, 30, of Dunkirk, New York; and SHERK, 27, of Buffalo, each pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison, and one count of wire fraud, which carries a maximum sentence of 20 years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.

Mr. Bharara praised the investigative work of the Criminal Investigators at the United States Attorney’s Office. He also thanked the Federal Trade Commission (“FTC”) for referring this case to this Office and the U.S. Marshals Service, Western District Regional Fugitive Task Force for their assistance. Mr. Bharara noted that the investigation remains ongoing.

If you believe you were a victim of this crime, including a victim entitled to restitution, and you wish to provide information to law enforcement and/or receive notice of future developments in the case or additional information, please contact the Victim/Witness Unit at the United States Attorney’s Office for the Southern District of New York, at (866) 874-8900. For additional information, go to http://www.usdoj.gov/usao/nys/victimwitness.html.

If you wish to report a crime by another debt collector, you may contact the FTC at 1-877-FTC-HELP. For guidance on coping with debt, and information about dealing with debt collection companies in particular, go to http://www.consumer.ftc.gov/articles/0149-debt-collection.

The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorneys Edward A. Imperatore and Jordan L. Estes are in charge of the prosecution.

The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.